The pharmaceutical and agricultural group Bayer has given activist investor Jeffery Ubben a place on its Sustainability Council.

The hedge fund manager is one of three new members who have been appointed to the committee. They are to "contribute their expertise in the areas of access to medicines, human rights and sustainable finance to the Council", as the DAX-listed company announced on Monday. Bayer established the external Sustainability Council in 2020; it meets twice a year with members of the Board of Management and advises it and other functions within the company on all sustainability matters. According to a report in the Financial Times, however, this informal position may not be enough for Ubben.

At the beginning of January, Ubben's investment company Inclusive Capital announced its investment in Bayer with a 0.8 percent stake. Ubben was one of the investors who had urged the company to find a successor for outgoing CEO Werner Baumann from outside its own ranks. Bayer complied by appointing the former Roche pharmaceuticals boss William Anderson.

Ubben spoke of a further "incentive for our significant investment in Bayer". He was enthusiastic about the company's strengths in research and development. "Bayer's Crop Science Division in particular has great potential to minimize the need for further deforestation by increasing the productivity of existing arable land," the 61-year-old emphasized. The Sustainability Council is given access to relevant documents and contact with experts within the company. However, as it has neither formal decision-making powers nor control rights, this position may not satisfy Ubben, as the Financial Times reports, citing people familiar with the matter.

Although he does not want to simply turn up and demand a seat on the Supervisory Board, he does not believe that seats on the Sustainability Council and the Supervisory Board are "mutually exclusive", the newspaper quoted Ubben as saying. He will also continue to raise the question of whether Bayer should not be split into an agricultural and a pharmaceutical company. "It has a conglomerate discount. It has an ESG discount. It has a governance discount, a litigation discount. These are all opportunities to create value." The new Bayer CEO Anderson, who he will meet soon, has "great opportunities".

A Bayer spokesperson would not comment on whether Ubben is seeking a seat on the Supervisory Board. The investment company Harris Associates, Bayer's fourth-largest shareholder, had already signaled its support in January.

Among activist investors, Ubben is considered to be rather reserved. He built the US investment company ValueAct into one of the most influential activist hedge funds in the world and launched a campaign against Microsoft in 2013, which led to the resignation of then CEO Steve Ballmer. In 2020, Ubben, who also sits on the board of directors of the US oil company Exxon Mobil, founded Inclusive Capital.

(Report by Patricia Weiß, with assistance from Ludwig Burger, edited by Olaf Brenner. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)